East African Business Week

DAR ES SALAAM, TANZANIA - With at least three mining firms showing keen interest to list at the Dar es Salaam Stock Exchange (DSE), an expert has advised that it would be prudent for them to raise capital through Initial Public Offers (IPO) instead of cross-listing their firms.
  An analyst at the Tanzania Securities Limited there are a number of benefits to be got from that including such incentives as corporate tax of 25 per cent as opposed to 30 per cent on the non-listed companies, and tax deductibility of all IPO costs.
  The Chief Executive Officer of Tanzania Securities limited, Marwa Moremi said that listing an IPO also provides Tanzanians an opportunity to invest in a company which is locally operating.
  "It provides the exit mechanism for investors who would want to divest their position and investors also have various incentives when investing in a DSE listed company compared to a non-listed company," said Moremi.
 It was recently reported that more mining companies have shown interest to list on the 13-year bourse. They are African Barrick Gold, the largest gold producer in the world joined with Kibo Mining plc, a mineral exploration firm focused on gold and nickel projects, and the Africa-focused oil and gas firm, Ophir Energy Plc which considering to list at the Dar bourse.
  Moremi said, "I do not see the disadvantage of cross-listing into the DSE, it is only that experience indicates that existing cross-listed counters do not add much into the liquidity or tradability of the stock instead, we have experience of some of the cross-listed stocks at the DSE that have not transacted since listing at the DSE."
  The African Barrick Gold , which has four gold mines in Africa's fourth largest gold producer Tanzania, said last week it was planning to cross-list on the country's bourse before the end of this year.
"ABG is expected to cross-list on the DSE in Q4 2011 after getting approval from the country's exchanges regulator, brokers at the Tanzania bourse," said the ABG's Vice President for Corporate Affairs, Deo Mwanyika.
  Mwanyika said, "We have made a commitment to cross-list on the DSE. Our initial plan was to cross-list by the end of September." ABG produced nearly 700,000 ounces of gold last year, and according to him, has a resource of 30 million ounces in Tanzania.
  "We plan to cross-list on the Dar es Salaam Stock Exchange not to raise capital, but to encourage the participation of Tanzanians in the ownership of ABG," said Mwanyika.
  Prior to its listing on the London Stock of Exchange (LSE), ABG was a wholly owned subsidiary of Barrick, which continues to hold 74 per cent of the issued shares in the business today. The remaining 26% stake, which is equivalent to 106.4 million shares, is held by ordinary shareholders.
  The company vice president said ABG has already prepared a company memorandum dated September 29, 2011 which has been approved by the Capital Market Securities Authority (CMSA) and DSE in connection with the listing.